I recently upgraded an Asus P5V-EM DO from ESXi 3.5 to 4.0 that had a local datastore, and found after the upgrade that my VMs were all marked as unknown / inaccessible and that datastore1 was now called snap-7ac07d75-datastore1 as shown below. To correct this problem I took the following steps.

1) Right click on the datastore name and select the Rename option. This will allow you to correct the datastore name, but the VMs will still be inaccessible. This is due to the VMs being registered with the VMFS datastore ID rather than the logical name. The 3rd image below shows the link between datastore1 and the VMFS ID.

2) Open the file /etc/vmware/hostd/vmInventory.xml. Update the vmx paths to reflect the new VMFS ID for the datastore.

3) After vmInventory.xml has been saved, the VM inventory list should refresh after several minutes and properly display the VMs registered prior to the upgrade.

4) When starting a VM you will prompted with the below message. Select the "I _moved it" option and click OK to resume booting the VM.